Mike Passanante: Hi, this is Mike Passanante. And welcome back to the Hospital Finance Podcast. Today, I’m joined by Maria Miranda who is the Director of Emerging Payment Models here at Besler. And Maria has joined us to talk about the first reconciliation report issued for the CJR program and what your hospital should be doing now.

So Maria, welcome back to the program.

Maria Miranda: Thank you, Michael.

Mike: So, we’ve reached the end of the first full year of CJR, and participating hospitals have received their first reconciliation report. How do you think that went?

Maria: Well, I think that hospitals that I’ve talked to seem to have a pretty good handle on the program or at least understand what’s important to be successful in the program. And most of them, like you said, have received the reconciliation report and have actually gotten a reconciliation payment, which is a really good start.

However, getting a handle on the data still seems to be a sore spot with some of the hospitals. And the biggest hurdle of course is trying to bring down the costs of post-acute care.

What I haven’t seen yet is a spike in formal agreements between hospitals and post-acute facilities. Hospitals that we’ve talked to that have participated in BPCI or other bundled programs in the past that perhaps had physician gain sharing in place have continued, have extended that that through CJR. But I really haven’t seen anything beyond that.

Mike: And I realize that most hospitals should have received their NPRA. But just in case there’s a facility listening that doesn’t know where to look, can you tell us where they can access the report and what they should do if they don’t see it?

Maria: Sure! So, the NPRA was issued in late April. And it was uploaded by CMS to the CJR Portal. So if you’re used to going in there and getting your reports, you should see additional zip files, and they’ll say like “reconciliation report.” You should see your hospital provider number. It should be easy enough to find on the portal.

But if, for whatever reason, you don’t see it on there, I would suggest that you immediately send an e-mail to CJR@CMS.HHS.gov. Give them your provider number, and let them know that it’s not there.

Mike: Maria, what are your thoughts on the actual reconciliation report?

Maria: So, I looked through the report. And it seems pretty self-explanatory. It’s very easy to read and understand the data that’s on there. The summary itself is five pages long. And there are also three links within the package that you get to three Excel tabs. And in those Excel tabs, you’ll see the reconciliation, the actual calculation that tells you how they came up with the amount that they’re reporting, the quality measures, and also, there’s an appeals form that you should complete and send back to CMS if you find that there’s a problem with the payment amount.

So, when you first look at the report, there will be that reconciliation amount. If it’s a positive number, then that’s the payment that you’re actually going to get back from CMS.

The section also has information about the claims and dates included in the period, as well as the reconciliation information such as your total composite quality score. It tells you which quality category you ended up falling into, the resulting discount amount that they applied, and whether or not you qualified for a payment.

That information can be a bit misleading however if you take it at face value without understanding the program rules.

This section gives you the report date which is also important to note, Mike, because you only have 45 days from the date that you get your report to submit an appeal. And you can only appeal for calculation errors.

Mike: You mentioned that the quality portion is a bit misleading. And I understand what you mean. But can you give us an example of a situation when a good quality category might be misleading?

Maria: Absolutely! So, I say misleading because, normally, you would think if your quality category is good, that you should be in pretty decent shape going forward, going into performance year two and beyond in the CJR program. But that may not be the case.

We have a client that we’re working with that got just that, a good quality rating. And their total score is 6.2. But in reality, when you dig down into that, they did not get any points for their risk complication measure because their measure was under the 30th percentile.

They actually submitted PRO data. But because they didn’t follow the actual submission requirements, they didn’t get credit for the PRO data.

So, that 6.2, even though it got them to the good category, that 6.2 only reflects how they did on HCAPS which is the patient satisfaction score.

And when you look at the grid for CJR, the good category starts at 6.0. It goes from 6.0 to 13.2. So, 6.2 is pretty much on the cusp there of being acceptable and being good. So this facility really needs to do a little extra work on understanding what information needs to be submitted for PRO—and we can get into that a little bit later—and they need to work on improving their risk scores.

And the risk score, again, it’s under the 30th percentile. You really need to understand how close to that you are and whether or not you can push that up a little further.

I guess the dangerous part of this is that, for this particular facility that has a 6.2, if that number falls just a little bit, they could go from good to acceptable. And the safest thing for them to do would be to actually make sure that they’re getting a score for each of those measures, that they’re getting those additional two points for PRO because that’s the cushion. You don’t want to find yourself in a situation where you go down to acceptable, and you actually lose an entire point on the discount for the target rate.

Mike: Let’s get into that PRO data a bit. We’ve talked about that data on prior podcasts. And if I understood you correctly, the data submission was voluntary. And as long as the participating hospital submitted the data, don’t they automatically get the two points?

Maria: Yeah, they do get the two points, Mike. But the problem is that you have to make sure that the information that you’re submitting meets the qualification. So, for CJR, for it to count, you have to submit on a total of 50 patients or 50% of your cases. And there are timeframes. You have to submit within that time frame or you’re not going to get credit.

Certain procedures are not included. So they’re only looking at elective procedures. So if you’re including cases in there that are not elective, and you’re doing the bare minimum—say you submit exactly 50 patients or 50%—and you included one or two in there that didn’t belong in there, now you didn’t meet that measure.

So it’s important to make sure that you’re including the correct cases. And don’t submit the bare minimum either just to give yourself a cushion.

Mike: Maria, if you’re a hospital that did not get a reconciliation payment, what should you do?

Maria: So, luckily, you do not need to make any payment this year if you went over your cap. But if you did not get a payment, then you really need to analyze the data and see where the problem is.

Did you miss out because you went over your target? Or did you miss out because of quality, and otherwise, you would have received a reconciliation payment? It’s really important to understand that difference.

Performance year two has the same 5% cap. And the target blend between the hospital and regional doesn’t change. So this means that you will be operating pretty much under the same rules. And if there’s no change in performance, then you have a good idea of what your outcome will be in performance year two.

So, dig into those quality scores, and also into the total cost of your episodes.

If you do not have a handle on the data, partner with someone that can help you make sense of it. Educate your physicians. Identify post-acute care partners that can help you reduce the cost if in fact you dig in and the cost is mostly on post-acute side.

These are all things that you should be doing anyway. But if you didn’t get a payment, then you’re already starting off on a bad footing. And you need to make some changes immediately to avoid having to make a payment to CMS for performance year two.

Unfortunately, you’re already halfway through performance year two episodes. So time is really of the essence.

Mike: Let’s turn the table around, Maria. If you’re a participating hospital that did get a reconciliation payment, do you have anything to worry about?

Maria: So, you have a couple of things to worry about. First of all, it depends on how well you did. If you received a reconciliation payment, how close were you to that 5% cap? Did you exceed that or did you come close?

So, if you got a payment of $150,000, but your cap was $325,000, then you still have an opportunity. There is a lot of opportunity for improvement there. If your quality score is acceptable, but you’re within striking distance of moving that to good, then again, there’s enough opportunity there.

Now, in terms of quality, because you’re already halfway through performance year two, what you do now may not impact performance year two. But the stakes get higher as you get to performance year three. So anything that you can do now will improve the odds.

The other thing that you do want to be aware of if you got a reconciliation payment is that between now and next year, CMS is still going to be receiving claims. And because the target amount doesn’t change, but any claims that come in impact your cost, anything that comes in between now and next year is going to lower your overall NPRA.

The consensus in the industry is that it’s about 1% to 2% of claims that come in after that. But 1% of claims can reduce your NPRA by about 50%. So that $150,000 could be $75,000 by the time you get to the second and final reconciliation.

Mike: Can a participating hospital challenge the information that’s on the report?

Maria: So, the hospital can appeal their NPRA. But they have to do that within 45 days. And they can really only appeal for errors in the calculation.

And again, it’s 45 days. So we’re probably in the homestretch right now since the reconciliation report came out in the end of April.

The other thing that I just want to note, Mike, when it comes to appealing your reconciliation, the hospital has to do that themselves. They need to submit that form directly. They can’t go through a consultant or any other representative because it won’t be accepted.

Mike: If you’re at a CJR participating facility, and you’d like some more clarity around your reconciliation report or some ideas of what you can do going forward in the program, Maria Miranda is here to help you with that. So feel free to reach out to Maria. She’d be happy to talk with you about your unique circumstances and what we at Besler might be able to do to help you. You can reach Maria at mmiranda@Besler.com.

Maria, thanks so much for coming by today and helping us understand more about the CJR reconciliation report.

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